Harry Curtis, a hotels and lodging analyst with JPMorgan in New York City, says Gaylord's decision to acquire and expand La Cantera could help San Antonio book larger conventions that previously had overlooked the city due to a shortage of convention-grade hotel rooms. "Our sense is that group demand is strong for San Antonio," he tells GlobeSt.com. "San Antonio has one of the highest growth rates of new room supply over the next three years, with nearly 7% growth per year through 2009. However, with the exception of a new 1,000-room Grand Hyatt and 1,000-room JW Marriott being built, most of the new supply is in the midscale and economy segments."

Gaylord CEO Colin V. Reed says the purchase marks an important step in the company's strategy to increase distribution to stockholders through acquisitions rather than relying strictly on new development. He says all other Gaylord properties were ground-up developments. Its most recent development was the 2,000-room Gaylord National Resort & Convention Center in National Harbor, MD, which opened in April and being touted as the largest resort hotel on the East Coast.

The company also is aggressively expanding existing facilities. In September, the city of Grapevine approved economic incentives enabling Gaylord to add more than 200,000 sf of meeting space, some 500 guest rooms, a resort pool and other recreational amenities to the Gaylord Texan Resort & Convention Center in Grapevine. In August, Gaylord committed to add more than 400,000 sf of convention and meeting space and a new 400-room all-suites hotel to Opryland Resort & Convention Center in Nashville.